Court Greenlights FTX Bankruptcy Vote Plan Despite Opposition
Highlights
- FTX creditors will vote on a bankruptcy plan after a court approved the process.
- The company says creditors will be paid in full with interest.
- Aggrieved creditors fault process as they will not receive the present market value for assets.
A United States court has approved the proposal by bankrupt crypto exchange FTX to hold a vote on the liquidation that best fits creditors. Creditors of the imploded exchange will vote on a liquidation plan despite previous opposition voices citing a downward payment of assets.
FTX Creditors to Vote on Liquidation
FTX creditors will vote on a liquidation plan that seeks to pay customers back in cash after several months. Bankruptcy Judge John Dorsey approved the voting plan documents while overruling opposing creditors. Andy Dietderich, FTX attorney explained the steps getting to this stage describing it as a huge team effort. The bankrupt firm sold assets and investments in other technology firms, real estate, and venture funds among others.
After its collapse and filing for bankruptcy, the company has recovered about $16 billion to pay creditors. These include $12 billion in cash with plans to pay customers with interest. This claim of “full recovery” was challenged by several creditors describing it as unfair because it’s a lot less than present values.
In November 2022, FTX which was the second-largest digital asset exchange at the time collapsed leading to huge losses in the market. The losses were estimated in billions setting a chain of events in crypto regulation and market sentiments.
Not All Creditors Are Happy
Several FTX creditors disputed the plan citing the difference in crypto values between 2022 and the present following the price jump this year. According to them, it is not a full recovery, creditors will be paid lower than market value. Furthermore, some users have filed action stating that FTX never owned the assets and must repay full values.
To put in context, crypto users who deposited one BTC on FTX before the bankruptcy will receive $16,800, the value at the time against current market values above $61,500. Aggrieved creditors argue that the difference is large and unfair while the company opined that it is the best way possible after assets were misappropriated.
Also Read: US Residents Can Pay Federal Tax in Bitcoin (BTC) If This New Bill Becomes Law
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